A flurry of announcements last week point again toward a Mahoning Valley economic resurgence that, after scratching beyond the surface, looks even rosier.
One ''little'' announcement is a $10 million Comfort Inn and banquet center in Liberty, on the site of the old Ramada Inn. It's one of many hotels announced or hinted at recently, including a large complex connected to the Eastwood Mall in Niles and a potential hotel at U.S. Route 422 and I-80 in Girard. Hotel operators anticipate an influx of oil and natural gas workers will book rooms for years.
One giant announcement is a $1.5 billion natural gas pipeline originating in Eastern Ohio, maybe Trumbull County, and extending to Michigan, then around Lake Erie into Canada. The pipeline, being developed by Enbridge Inc., DTE Energy and Spectra Energy Corp., may originate further south but will run through Columbiana, Mahoning and Trumbull counties.
On the surface, the Nexus Gas Transmission System looms large for the local economy because of the construction and pipe mill jobs and sale of rights of way to property owners along the route. Local leaders should begin now to broker spending plans if the Ohio Department of Transportation sells a right-of-way to build the pipeline up state Route 11 and across I-90.
That's a logical possibility because it cuts through the heart of the Utica Shale territory from which the gas would be extracted through hydraulic fracturing, or fracking, and it allows Nexus to negotiate with only one property owner. Local leaders should force themselves into those negotiations, ensuring that money ODOT generates here stays here in the form of rail, highway and other transportation projects that help the Valley even further capitalize on shale development.
The pipeline announcement does not reduce the potential for midstream processors or even a cracker plant being constructed here. Midstream processors are large factories that refine gas for industrial use, such as plastic making. The Nexus pipeline will serve an existing market in Michigan and Canada beginning in 2015. The potential remains for more pipelines to serve a yet-to-emerge midstream processing cluster in and around Trumbull County.
The 2015 date shows how long-term the shale play will be here, and it's further proof that we are only in the infancy of an economic turnaround because of it.
But here's more scratching beyond the surface: Some financial advisers are predicting struggles for Western Canada gas suppliers because the Utica Shale and Nexus pipeline would permanently and dramatically shrink the market for gas pulled from formations in Alberta. Some say that in several years, half of the gas used in Ontario and Quebec will come from the Utica Shale.
Natural gas industry analysts, meanwhile, predict that the Utica Shale will produce 1.5 billion cubic feet a day of natural gas by 2017, much of it from Trumbull County. The Nexus pipeline is expected to be 36 inches in diameter, large enough to carry 2 billion cubic feet per day. Almost nothing comes from the Utica currently.
With such robust projections, it's pretty safe to say that even with the Nexus pipeline announcement, we've only begun to see the economic benefits from the shale play.